What happens if the plan terminates for all participants?

• A. COBRA coverage continues for each beneficiary
• B. COBRA coverage ends for all affected beneficiaries
• C. COBRA rights transfer to another plan automatically
• D. COBRA automatically converts to an individual policy

Answer: (B)

COBRA continuation is tied to the ongoing existence of the employer’s group health plan. If the plan is terminated for all participants, there’s no underlying policy left to extend, so COBRA coverage ends for everyone who was covered under that plan. There’s no automatic transfer to another plan or automatic conversion to an individual policy through COBRA—the continuation option simply ceases when the plan itself ends. If a new plan later becomes available, eligibility would depend on the specifics of that new plan, but it wouldn’t be an automatic COBRA continuation of the terminated plan.